Archive for the ‘RE Finance’ Category

Individuals and businesses are becoming more and more motivated to relocate to Nevada due to the fact that there is no state imposed income tax. In order to take advantage of the income tax savings, several factors come into play. Evaluate your personal and corporate tax climate and use the following information to evaluate your potential for the Nevada tax savings.

NV Tax Advantages

In order to take advantage of Nevada’s “tax hospitality” a taxpayer must make Nevada its principal place of residence, i.e. your primary home. Residency is the single most important factor in gaining Nevada’s tax advantages.

A “close connection test” is implemented and must be passed in order for a taxpayer to establish state residency. The “close connection test” identifies if Nevada is the state in which a taxpayer has the closest ties during a taxable year. Various factors include: physical address, sources of income, voter registration, home ownership, the location of you closest social and business contacts, and more. Individuals who are considered “domiciled” in Nevada generally escape taxation. A corporation organized and domiciled in Nevada can also significantly reduce its state tax burden by shifting its corporate level of activity to the state of Nevada.

California’s Proposition 30 has made communities like Incline Village, Glenbrook, Zephyr Cove , Nevada on Lake Tahoe’s North Shore and particularly the area in SQ Reno attractive options for Buyers looking for tax relief combined with the incredible lifestyle opportunitie of the Lake, skiing, golf, and pristine apline living within a few hours of the Bay Area, Wine Country, and Silicon Valley.

For help with tax planning, contact Kevin Hameister of Ashley Quinn CPA’s and view a comparative analysis between Nevada and California Taxes.

Have you recently purchased a home in Nevada, and does it qualify as your primary residence? If so, consider protecting your asset by filing a homestead exemption in Nevada. Many states do not require you to file for this asset protection, Nevada does.

What the Law Provides

When you record a Declaration of Homestead, Nevada law protects the equity in your home up to $550,000 from general creditor claims (unpaid medical bills, bankruptcy, charge card debts, business/personal loans, accidents) but would not preclude a seizure or forced sale of your residence from general creditors if your equity exceeds the $550,000. A creditor may file suit and can record a judgment lien against any real property you own. Recording a Declaration of Homestead protects your principal residence up to the statutory maximum. For example, if the value of your home is $645,000 and you have a first mortgage of $485,000 plus a second mortgage of $10,000, the equity is $150,000.

What is not Protected

The Homestead law does not protect you against debts secured by a mortgage or deed of trust, payment of taxes, IRS lien, mechanic’s lien, child support or alimony payments.

Furthermore, the federal bankruptcy law (11 United States Code 522) acknowledges that a state law providing for a homestead exemption, such as Nevada’s, will be honored in most proceedings. However, one should be aware of changes to the law made by the 109th Congress in S. 256 (the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005“). Under certain circumstances, the federal $125,000 exemption limit may override state law.

Wednesday, Sept. 21- The Federal Reserve announced they will invest $400B in funds to purchase long term treasuries and mortgage back securities, and will sell short term treasuries. Mortgage Backed Securities traded up nearly 125 basis points near the close of the market on Wednesday, breaking out to a new all time high. Mortgage rates move in the opposite direction, so borrowing rates are nearing all time lows and likely trending lower. This was a surprise to investors with fears that more stimulous spending is yet another sign of the weak economy, but another opportunity for buyers to take advantage of the combination of historically low interest rates and a large inventory of homes and condos with motivated sellers! View Wall Street Journal’s update on the MBS market as of Thursday, Sept. 22

This is good news for buyers who have a wide selection of property, motivated sellers, and historically low interest rates. Currently, there are 227 active single family homes, 155 condos, and 61 PUD’s (townhomes) listed for sale in the Incline Village- Crystal Bay market. 162 properties have sold so far in 2011 which is an average of about 18 sales per month for the first 9 months of 2011. With 36 properties in escrow currently, this represents a jump in the number of anticipated sales in the next month or two. We have seen an increase in showings in Septemeber and this fall will be telling for the number of property sales, as many buyers look through the summer while the inventory is large, and make their decision to purchase before the snow flies.

In Washoe County, assessed value is calculated as 35% of taxable value. In Incline Village, the current tax year rate is $3.3197 per $100 of assessed value. Property taxes are calculated by taking the current year tax rate and multiplying it by the assessed value. If that amount is greater than a 3% to 8% increase over the prior year’s taxes, an abatement may be applied to limit the increase.

“BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST – THE PARACHUTE.” G.B. Stern. And last week’s Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad…depending on which survey you looked at, and what numbers you focused on.

First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month’s read of 10.0%. But what do these numbers actually tell us?

Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated. Sierra Sotheby's International Realty is a licensed brokerage in the Lake Tahoe region both in California and Nevada.